More Connecticut homes slip underwater in first quarter

Rob Varnon

Published 8:22 pm, Wednesday, June 12, 2013

The number of underwater homes in Connecticut rose in the first quarter, as the state missed the tide that helped lift the national real estate market.

CoreLogic, the California-based real estate research firm, said Wednesday the number of Connecticut borrowers who owed more on their mortgages than the houses are worth increased to 15.8 percent in the first quarter compared to 14.7 percent a year ago.

While Connecticut's troubles worsened in the January-through-March period, the rest of the country experienced vast improvements as home prices climbed.

The number of American homes underwater fell to 19.8 percent from 23.7 percent, CoreLogic said.

"The negative equity burden continues to recede across the country thanks largely to rising home prices," Anand Nallathambi, president and CEO of CoreLogic, said. "We are still far below peak home price levels, but tight supplies in many areas coupled with continued demand for single-family homes should help us close the gap."

CoreLogic said a handful of states were skewing the number upward. Nevada, Florida, Michigan, Arizona and Georgia accounted for 32.8 percent of all homes with negative equity. In Nevada, 45.4 percent of homes were underwater, but that's down from 61.2 percent.

Fairfield County's fortunes mirrored those of the state's. CoreLogic said 15.9 percent of homes in the county had negative equity, up from 15.4 percent a year ago.

The state and Fairfield County saw the number of underwater homes increase from the fourth quarter of last year to the first quarter of this one.

Though she was less surprised than Deak about the increase in underwater homes, noting that the first quarter was relatively slow due to weather and clean up from the February blizzard and from Superstorm Sandy, which hit in the fourth quarter of last year.

"I'm not totally surprised -- we are still digging through things," she said.

She said the state's economy has been recovering at a slower pace than the nation's, and despite sales that have been increasing this year compared to last, "We're only seeing an increase of about 2 percent in the sales price year over year through June."

Much of that has come at the tail end of the first quarter and through the second, she said.

On Wednesday, the U.S. Commerce Department reported that income in Connecticut in 2011 grew just 2.2 percent compared to the national rate of 2.7 percent.

Adams said in spite of these drags, the market is vastly different today than it was just three month's ago.

"All the indicators are showing the market is improving," she said, listing higher appraisals for properties that are being bought, a declining inventory of houses on the market and greater activity in Fairfield County.